Shards Protocol raises $2M for Web3 reputation and rewards system

Shards Protocol, a reputation protocol that rewards users for their Web3 milestones, hasraised $2 million across multiple funding rounds.

Participating in the round were Animoca Brands, Kyber Ventures, and more. Earlier this year, the company announced its expansion from Shards.Tech to Shards Protocol, taking user acquisition and rewards to the next level. Web3 gaming guilds such as Yield Guild Games also made a strategic investment into Shards Protocol.

Shards initially started as a software development kit (SDK) layer that allowed game studios to boost their retention rates and average in-game spends by more than 100%, allowing anyone (players, non-players, speculators or just community members) to buy a fraction of that team, which they can buy and sell freely on the marketplace.

Multiple games integrated Shards.Tech into their product offerings and game campaigns seeing an increase in retention rate by over 200% in 2024, generating over $400,000 in trading volume using its private alpha.

“The company onboarded over 1 million users across all products and generated $1M + trading volume, but we quickly realized that Web3 needed more,” said Stefano D’Silva, CEO of Shards, in a statement. “That is why we introduced flagship product Aura, a recognition layer that transforms your on-chain contributions into reputation and rewards.”

Most of the new capital will be used to enhance Aura and its integration within the Web3 ecosystem as the project gears up for a token launch, with further expansion of the product throughout the year. Yat Siu, executive chairman of Animoca Brands, said in a statement, “We are glad to support Shards Protocol; it is revolutionizing Web3 user acquisition by seamlessly integrating quest-based engagement and campaigns.”

Loi Luu, founder of Kyber Ventures and Caliber, said in a statement, “Shards Protocol’s Aura represents a powerful step toward on-chain identity that is earned, not given. Aura’s approach to reputation aligns with our vision of user-centric Web3 infrastructure, one that rewards meaningful participation and promotes verifiable trust.”

Shards Protocol’s unique value proposition lies in an ecosystem of initiatives spearheaded by its reputation protocol Aura, which rewards users for its on-chain milestones.

D’Silva said, “With Aura, we are setting a new standard for credibility in the space by empowering the silent contributors who have been staking, building, and supporting projects without recognition. By transforming on-chain activity into reputation and rewards, Aura brings a layer of transparency and meritocracy that Web3 has been missing until now.”

Users can display their reputation scores across their journey in Web3, collect badges and more directly on their X (formerly Twitter) profiles. The company states that the more badges users mint, the more they build their reputation, enabling them to access more rewards.

Gabby Dizon, cofounder of Yield Guild Games (YGG), also said in a statement, “Aura by Shards is exploring ways to recognize what people are doing on-chain and connect them with opportunities. It’s always good to see more projects building toward better ways for web3 communities to grow and organize.”